The discount of Western Canada Select (WCS) heavy crude to the North American benchmark West Texas Intermediate futures (WTI) narrowed on Friday, continuing a trend of what has been historically tight levels this spring.
WCS for June delivery in Hardisty, Alberta, settled at $9.15 a barrel under WTI, according to brokerage CalRock, after having settled at $9.35 under the U.S. benchmark on Thursday. * Canadian heavy crude has been trading at a tight discount in recent months in part due to the opening of the Trans Mountain pipeline expansion one year ago, which boosted the country’s oil export capacity.
* The tight WCS discount also reflects tighter U.S. sanctions on heavy crude-producing countries such as Venezuela, which is boosting demand for non-sanctioned heavy crude producers.
* The discount on Canadian crude is currently almost $4 below what it averaged in 2024, but RBN Energy analyst Martin King said he expects the current tightness to be sustained for a while.
“This kind of $9 to $10 range is very supportable,” King said. “There’s not (an easy substitution) for Canadian barrels in the Midwest and parts of the Gulf Coast, and we still have spare pipeline capacity for all the export pipes from western Canada.” * Global oil prices fell over 1% lower on Friday and recorded their biggest weekly losses since the end of March, as traders turned cautious ahead of an OPEC+ meeting to decide the group’s output policy for June.
(Reporting by Amanda Stephenson in Calgary; Editing by Mohammed Safi Shamsi)